CHILE: MINING ROYALTY TAX.
Today’s Chilean Official Gazette unveiled Law No. 21,591, ushering in a transformative “Mining Royalty” tax applicable to Individual and Corporate Miners from January 1st, 2024. Here are the key highlights:
1. Annual Accrual and Reporting:
- The Mining Royalty Tax accrues annually, with reporting and payment due in April, aligning with Article 69 of the Income Tax Law.
2. Ad-Valorem Component:
- A 1% rate applies to the copper annual sales of miners exceeding 50,000 metric tons of fine copper.
- Adjusted taxable operational mining income impacts payment for the ad-valorem component.
3. Mining Margin Component:
- Miners with annual sales over 50% from copper, exceeding 50,000 metric tons, face a mining margin component with rates ranging 8% – 26%.
4. General Mining Royalty Rates:
- Miners not subject to the mining margin component face rates of 0.4% – 34.5%, applied over adjusted operational mining income.
5. Determination Factors:
- The Mining Royalty considers factors like the average annual sales of the last 6 periods and the total sales value of related entities considered miners.
- The value of fine copper is determined based on the average price of copper Grade A in the London Metal Exchange.
6. Monthly Provisional Payments:
- Miners subject to the tax must make monthly provisional payments based on the weighted average of prior-year percentages.
- The provisional payment rate is adjusted quarterly.
7. Maximum Tax Burden:
- The law establishes a maximum limit on miners’ potential tax burden at 46.5% of adjusted taxable operational mining income.
Stay informed as Chile’s mining landscape undergoes this significant tax transformation. Read the full details in